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Today we want to know, question 47, george contemplates the purchase of 100 shares of stock selling for $15 per share.
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The stock pays no dividends.
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The history of the stock indicates that it should grow at an annual rate of 15 % per year.
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How much should the 100 shares of stock be worth in five years? and so you're going to take your 100 shares of stock at $15.
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Any time you have stock, you're going to take that number of shares.
00:30
And so the number of shares in this case is 100 shares.
00:35
And you're going to multiply that amount of shares by the amount of the price it is.
00:41
Well, they're $15 per share.
00:45
And so 100 times 15.
00:48
Take your little calculator.
00:50
You're going to do 100 times 15.
00:54
And you are going to get a value of $1 ,500.
01:02
And so what we're figuring out here now is now that we're going to, we have george paying $1 ,500 for his shares, he knows that the history is going to be that it's going to grow at an annual rate of 15 % per year.
01:20
We now want to know how much that would be worth in five years.
01:24
So we use our compound interest formula, which is a equals p times one plus r over n to the nt power...